KHNP ends contract talks with Daewoo consortium on Czech nuclear project

Overview

Updated 1 hour ago

Korea Hydro & Nuclear Power told its chosen construction partner on October 29 that the deal is off. The state utility ended months of contract talks with the Daewoo-Doosan consortium for the $18.6 billion Dukovany nuclear plant in the Czech Republic, after the two sides failed to close a cost gap of more than 1 trillion won ($750 million).

KHNP says it will open fresh bidding and sign with a new builder by July 2027, keeping site preparation on track for January 2028. The question hanging over the project: whether anyone can build a first-of-a-kind APR1000 reactor at a price both sides accept.

Why it matters

Korea's largest nuclear export could slip if the builder gap isn't closed, and Seoul's reactor-selling pitch depends on Dukovany staying on schedule.

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Key Indicators

25 trillion won

Contract value for Dukovany units 5 and 6

The main contract KHNP signed with Czech buyer EDU II in June 2025, roughly $18.6 billion.

Over 1 trillion won

Unresolved cost gap between KHNP and builders

The gap KHNP's project chief says remained after all concessions, more than the 10% cut KHNP sought from the original bid.

15 months

Failed negotiation period after main contract signing

Includes two CEO meetings, 78 working-level sessions and 11 disagreement-review committee meetings.

July 2027

Target for signing a new construction contractor

KHNP's stated deadline to keep the January 2028 site-preparation date.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Choi Il-kyung

KHNP vice president and head of project operations

Leading the new-contractor selection for Dukovany

Kim Jung-kwan

South Korea's industry minister (trade, industry and energy)

Backed KHNP's decision publicly

Organizations Involved

Korea Hydro & Nuclear Power

State-run nuclear operator

Prime contractor for Dukovany units 5 and 6; seeking a new construction builder

The state utility that won the Dukovany order and holds design, procurement and construction (EPC) responsibility for it.

Daewoo E&C

Construction contractor

Lead builder of the consortium KHNP dropped; urging talks to resume

The lead builder KHNP chose in 2018; it now says the terminated talks cut too little review time and shifted too much risk onto builders.

Doosan Enerbility

Heavy equipment manufacturer

Consortium member that says it will compete in the new tender

Supplier of reactor equipment for Dukovany; it distanced itself from Daewoo's protest statement and plans to rebid for the construction work.

Elektrarna Dukovany II (EDU II)

Czech state-owned utility subsidiary

Customer and counterparty on the June 2025 main contract

The Czech buyer, a subsidiary of state utility CEZ, that awarded KHNP the Dukovany contract.

Timeline

2018 October 2026

7 events Latest: Today

Tap a bar to jump to that date

October 2026
KHNP ends construction talks with consortium
Today Contract

KHNP announces it is terminating negotiations, citing a cost gap over 1 trillion won, and plans new contractor bidding.
Today
KHNP presents revised contract terms
Dispute

KHNP introduces revised terms; the consortium gets about three weeks to review and asks for a Dec 31 extension.
October 7th, 2026
June 2025
KHNP signs Dukovany main contract
Contract

KHNP signs the main contract with Czech buyer EDU II for two 1,000 MW APR1000 reactors.
June 2025
January 2024
Builder submits unit prices
Bidding

Consortium submits its construction unit prices to KHNP, which later says it accepted them.
January 2024
2023
Disagreement emerges over added work
Dispute

Consortium demands cost settlement for additional construction quantities during revised bidding; KHNP refuses.
2023
2022
Initial bid fixes price model
Bidding

KHNP and the consortium agree on a fixed-price contracting model and unit prices in the first bid.
2022
2018
KHNP selects Daewoo consortium as Dukovany builder
Agreement

KHNP pre-selects the Daewoo E&C-led consortium as construction partner and signs a cooperation agreement.
2018

Scenarios

KHNP signs a new builder by July 2027, project stays on schedule

Likely Resolves by Jul 31, 2027

Discussed by: KHNP, Yonhap, Third Angle News

KHNP runs a competitive tender and signs a construction contract by July 2027 as planned, keeping site preparation on track for January 2028. Third Angle News names Hyundai E&C and Samsung C&T as likely lead candidates, with DL E&C and GS E&C possible participants. Doosan Enerbility has already said it will compete. KHNP's Choi Il-kyung says the project can fully recover from the setback.

Daewoo E&C wins the rebid and rejoins the project

Possible Resolves by Jul 31, 2027

Discussed by: Korea Herald, industry observers

Daewoo E&C, which objected to the termination and urged KHNP to resume talks, enters the new tender and wins it. KHNP has said Daewoo remains eligible despite a cooperation-agreement clause barring rebidding. For Daewoo to win, either KHNP must soften its fixed-price terms or Daewoo must accept them — the exact gap that broke the talks.

Daewoo challenges the tender; legal fight delays site work

Unlikely Resolves by Jan 31, 2028

Discussed by: Korea Herald (cites risk of legal complications)

Daewoo E&C files a court challenge — likely seeking an injunction — against the termination or the new tender, arguing the October 7 terms gave it too little review time. The Korea Herald notes the dispute 'raises concerns over potential delays and legal complications' for Dukovany. An injunction could push back the July 2027 signing or the January 2028 site-preparation start.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2009-2024

UAE Barakah nuclear plant (2009-2024)

South Korea won its first overseas nuclear order in 2009, a contract to build four APR1400 reactors at Barakah in the United Arab Emirates, deliberately priced lower than Western rivals to break into the export market.

Then

The four units reached commercial operation between 2021 and 2024, cementing Korea's status as a nuclear exporter.

Now

Barakah became the template for Korea's nuclear export model and the fixed-price contracting KHNP now cites as its precedent.

Why this matters now

KHNP points to Barakah — where the APR1400 was already proven — as proof its fixed-price approach works. Construction partners counter that APR1000 is a first commercial deployment, not a proven design.

2005-2023

Olkiluoto 3 EPR (2005-2023)

Finland ordered a first-of-a-kind European Pressurized Reactor from an Areva-Siemens consortium in 2005 under a fixed-price turnkey contract with no cost-adjustment mechanism.

Then

The build ran more than a decade late and costs ballooned well beyond the original budget, triggering years of arbitration over who pays.

Now

Olkiluoto 3 became the global cautionary example of first-of-a-kind reactor risk absorbed by contractors under a fixed price.

Why this matters now

The Daewoo-led consortium warns APR1000's first commercial build carries the same exposure Olkiluoto 3 exposed — exactly the risk KHNP's fixed-price terms would push onto builders.